EnviroStar Inc. (AMEX:EVI) shares edged up 1.7% in premarket trading on Tuesday after the company posted record first-quarter revenue, which narrowly missed analyst forecasts, while earnings came in below expectations due to higher spending on technology and integration initiatives.

The commercial laundry equipment distributor reported adjusted earnings of $0.11 per share, short of the $0.15 consensus estimate, as the company accelerated investments in modernization and operational optimization. However, revenue rose 16% year-over-year to a record $108.27 million, just shy of the $109.54 million expected by analysts. Gross profit climbed 17% to a record $33.9 million, yielding a record gross margin of 31.3%.

“Our record results this quarter highlight the success of our sales organization and our ongoing progress in capturing market share across key regions,” said Henry M. Nahmad, Chairman and CEO. “We believe that this performance underscores the strength of our strategy and the capabilities we are developing across our platform.”

Despite strong top-line growth, operating income declined to $3.6 million from $5.0 million in the same quarter last year, while net income fell to $1.8 million from $3.2 million. Adjusted EBITDA totaled $6.8 million, or 6.2% of revenue, compared to $7.6 million or 8.1% in the prior-year period.

Management attributed the profitability decline to long-term strategic investments, including technology upgrades, service expansion, and the integration of newly acquired businesses. The company also incurred one-time expenses related to its participation in North America’s largest industry exposition during the quarter.

EnviroStar continues to pursue its buy-and-build growth strategy, completing four acquisitions since the start of fiscal 2025, including the largest in its history. The company also declared a special cash dividend of $5.0 million in the quarter, reflecting management’s confidence in its financial stability and long-term growth outlook.

EnviroStar stock price

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